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BP Q1 profits up 135% on higher oil price

BP Q1 profits up 135% on higher oil price
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First Published: Tue, Apr 27 2010. 12 19 PM IST
Updated: Tue, Apr 27 2010. 12 19 PM IST
London: Oil major BP Plc reported a 135% jump in first-quarter net profits, compared to the same period in 2009, and beat all forecasts, thanks to higher crude and gas prices.
BP said replacement cost net profit, which strips out unrealized gains related to rises in the value of inventories, was $5.65 billion in the quarter, after Brent crude rose 72% to average over $76/barrel.
One dealer said the stock was likely to open up 2%-3% on the results.
BP managed to outperform expectations partly because it also managed to achieve much higher prices for its gas, despite a drop in European benchmark gas prices compared to the first three months of 2009.
Higher throughput at its refining unit also allowed the company to outperform expectations in this business, although a halving of margins compared to the first quarter of 2009 meant the overall result was sharply lower.
The world’s third-largest Western oil major by market value said oil and gas production was broadly flat compared to the same period of 2009, at 4.01 million barrels of oil equivalent per day -- just ahead of forecasts.
BP said it had agreed to buy a 15.7% interest in Valhall and a 25% interest in Hod, both located in the southern part of the Norwegian continental shelf, from France’s Total for $991 million in cash.
It was the latest in a string of acquisitions by the oil major in recent months, after it agreed to pay Devon Energy $7.0 billion for assets in Brazil, Azerbaijan and the Gulf of Mexico.
The London-based company also said it would pay $900 million for a 75% stake in the oil sands assets of unlisted Canadian company Value Creation.
The tie-up was announced last month but no details on price or stake size were revealed then.
Excluding one-off items, which amounted to a net charge of $49 million, BP’s replacement cost result was $5.65 billion, ahead of an average forecast of $4.78 billion from a Reuters poll of nine analysts.
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First Published: Tue, Apr 27 2010. 12 19 PM IST